SOURCE: Patron Systems

April 10, 2007 17:00 ET

Patron Systems Reports Full Year 2006 Financial Results

Sales and Marketing Initiatives Translate to Revenue Growth

BOULDER, CO -- (MARKET WIRE) -- April 10, 2007 -- Patron Systems, Inc. (OTCBB: PTRN), a leading provider of application software and services focused on business process management for the public sector, today reported financial results for the year ended December 31, 2006.

Revenue for the full year 2006 was $1,188,045, up 564% compared to revenues of $178,821 in 2005. The growth in revenue reflects increasing adoption of the Company's software solution, FormStream. Revenues reflect the Company's decision to divest its PolicyBridge business, which has been classified as a discontinued operation since December 31, 2006.

Operating loss for the year ended December 31, 2006 was $3,211,705 compared with a loss of $23,446,113 for the comparable full year of 2005. Operating expense for 2006 was $4,251,799 compared to $23,405,761 in 2005.

Net loss from continuing operations before taxes for the year ended December 31, 2006 was $4,372,329 compared with $40,589,196 for the comparable full year of 2005.

Net loss available to common holders for 2006 was $9,344,434 compared to net loss of $44,446,151 for 2005. The Company's loss per basic and fully diluted share available to common holders was $1.27 in 2006 compared to $22.78 in the comparable year of 2005.

Cash and cash equivalents at December 31, 2006 were $541,570.

"In 2006, Patron Systems transformed itself from both a business and financial standpoint. Our results for the year clearly demonstrate that we made significant headway in improving both top- and bottom-line financial performance. Our sales for the year increased over 564% over the prior year, and we reduced operating expenses by over 82%. Additionally during 2006, we completed a debt-for-equity swap and two equity financings to strengthen our balance sheet," said Braden Waverley, Chief Executive Officer.

"Much of this fiscal success was a result of changes we made to our business strategy. In 2006, we transformed the Company into an enterprise focused on the mobile data sharing requirements of the public safety marketplace. As part of this strategy, we made the decision to divest our PolicyBridge business and concentrate solely on opportunities for our FormStream software product. Being an early stage software company, we determined that maintaining two applications would consume too much of the Company's finite resources.

"The vast growth opportunities for FormStream both within and beyond our current core market of public safety warrant that we maintain focus of our resources. As a result of this focus, new customer contracts and purchase orders of FormStream for the twelve months ended December 31, 2006, reached approximately $1.7 million compared to approximately $200,000 in the same period during 2005. In addition, the Company now has customers nationwide, including major metropolitan markets in the Midwest and our first win in the Pacific Northwest.

"We believe that user applications for FormStream go beyond the law enforcement market opportunity. The same way in which FormStream can be used to help law enforcement agencies, it can also be used to systematize, categorize, and manage processes and information for many government agencies. While our sales and marketing efforts to date have mainly focused on law enforcement markets, we continue to look at other key verticals and will enter those markets when the time is right."

Mr. Waverly concluded, "While we made significant adjustments to focus and streamline the Company in 2006, we have only begun to execute on our business plan. We have robust product and service offerings with clear competitive advantages, and we are operating in a market that offers significant growth potential. Additionally, we continue to look for potential acquisition opportunities where it is fiscally and strategically beneficial to Patron. As we see these opportunities, we will evaluate them with respect to how they will benefit both the short- and long-term success of Patron."

Conference Call

The Company will hold a shareholder overview conference call on Thursday, April 12, 2007 at 5:00 p.m. ET. A live webcast of the conference call will be available online at in the investor relations section of the Web site. Web participants are encouraged to go to the Web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software. Listening to the webcast requires speakers and RealPlayer™ software, downloadable free at Those without Web access should access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (877) 407-4018 for domestic callers and (201) 689-8471 for international callers.

After the live webcast, the call will remain available on the Company's Web site,, through May 12, 2007. In addition, a telephonic replay of the call will be available until April 19, 2007. The replay dial-in number is (877) 660-6853 for domestic callers and (201) 612-7415 for international callers. Please use account number 3055 and conference ID 237934.

About Patron Systems

Patron Systems, Inc. provides application software and services focused on process management in the public sector. Patron's current application software offering, FormStream, is an open standards information sharing tool that addresses the need for law enforcement and public safety agencies to share information between local, state and federal law enforcement and homeland security agencies. FormStream is a mobile electronic forms (e-forms) application, which provides a secure, highly scalable, open standard, network independent method for the distribution and synchronization of e-forms to mobile devices. The implementation of FormStream allows its user agencies to update and modernize their business processes to utilize the sophisticated form and user based rules and process routing capabilities of FormStream. FormStream addresses mobile e-form creation, capture and sharing over wireless networks and manages data in industry standard formats (forms: .pdf, XDP and XML; law enforcement: Global Justice XML data model (GJXDM) and National Information Exchange Model (NIEM)). Further information is available at

Forward-Looking Statements

This release may contain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current estimates and projections about Patron Systems' business, which are derived in part on assumptions of its management, and are not guarantees of future performance, as such performance is difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Such factors include, but are not limited to, the Company's ability to execute effectively its business plan and acquisition strategy, changes in the market for business process management, mobile electronic forms (e-forms) and electronic message management solutions, changes in market activity, the development of new products and services, the enhancement of existing products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages. These and other risks are described in the Company's filings with the Securities and Exchange Commission, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company assumes no obligation to update information concerning its expectations.

Contact Information

    Martin "Tork" Johnson
    Patron Systems, Inc.
    cell: +1-312-543-7488

    Denise Roche (investors)
    Catherine Bright (media)
    both with The Ruth Group